Ukrainian MP Yaroslav Zheleznyak said on Wednesday that the National Bank of Ukraine (NBU) had to “print” another 30 billion hryvnia ($814 million) over the last week, in a reference to the central bank’s purchasing of local bonds.
Zheleznyak wrote on his Telegram channel, “Over the past week (August 16-23), the NBU printed another 30 billion hryvnia. The total amount of NBU financing through budget printing reached 285 billion hryvnias ($7.7 billion).”
The Ukrainian government had previously revealed that the country is running a budget deficit of about $5-7 billion dollars per month. Given that tax revenues and customs payments have failed to cover this gap, the National Bank has taken to printing money by purchasing the government’s bonds to cover expenditures. However using a central bank to finance a deficit can increase the risks of inflation in an economy.
However according to Zheleznyak, the government bond sales have brought very little in the way of relief to the budget shortfalls.
He added that of the $5 billion in foreign aid the country had been promised for August, they had only received $1.4 billion so far. $350 million of that aid was provided by Canada to purchase gas.
